DealoftheWeek:AT&TtoBuyTimeWarnerfor$85.

4B
AnnouncementDate October22,2016
Acquirer AT&T,Inc.(NYSE:T)
AcquirerDescription Providestelecommunicationsanddigitalentertainmentservices
Incorporatedin1983andheadquarteredinDallas,Texas
AcquirerFinancial MktCap:$226.9billion LTMEBITDA:$54.2billion
Statistics EV:$350.6billion LTMEV/Revenue:2.1x
LTMRevenue:$164.1billion LTMEV/EBITDA:6.5x
TargetCompany TimeWarnerInc.(NYSE:TWX)
TargetDescription OperatesasamediaandentertainmentcompanyintheUnitedStates
andinternationally
Foundedin1985andheadquarteredinNewYork,NY
TargetFinancial MktCap:$67.9billion LTMEBITDA:$8.0billion
Statistics EV:$91.6billion LTMEV/Revenue:3.3x
LTMRevenue:$27.9billion LTMEV/EBITDA:11.5x
AcquirerAdvisors JPMorgan,BankofAmericaMerrillLynchandPerellaWeinberg
TargetAdvisors Allen&Co.,CitigroupandMorganStanley
Price/Consideration $85.4billion Cashandstock
Rationale Thecombinedcompanywillbecapableofbothproducingcontentand
distributingittomillionswithwirelessphones,broadband
subscriptionsandsatelliteTVconnections
WhenJeffandIstartedtalking,itbecamecleartousveryquicklythat
wesharedaverysimilarvision,RandallL.Stephenson,AT&TsCEO,
saidSaturday,referringtoJeffreyBewkes,TimeWarnersCEO.Time
Warner,webelieve,istheclearleaderinpremiumcontent.
TheriseofonlineoutletslikeNetflix,AmazonPrimeandYouTubeand
theshiftofyoungercustomersfromtraditionalmediahavepressured
mediacompaniestoseekoutconsolidationpartners.Thesemedia
companiesareanticipatingdropsinfeesfromcableserviceproviders
anddecliningrevenuefromadvertisers.Gettingbiggerequatesto
morenegotiatingleveragewithserviceprovidersandwithadvertisers
DealPoints AT&Tisoffering$107.50ashareincashandstock,representinga
roughly35%premiumtowhereTimeWarnersstockwastrading
beforenewsreportsofthemergertalksemerged
JPMorganandBankofAmericaMerrillLynchareprovidinga$40
billionbridgeloan
OfNote Overthelastdecade,TimeWarnerhasspentsignificanttimesellingor
spinningoffAOL,manyoftheTimeInc.stableofpublications,and
TimeWarnerCable,whichwassoldtoanothercableoperator.The
remainingbusinessesareHBO,oneofthemostadmiredpayTV
channels;WarnerBros.moviestudios;andcablechannelsthatinclude

CNN,TNT,TurnerSportsandTBS

info@pillarsofwallstreet.com www.pillarsofwallstreet.com